Wk 11 - Accounting for Manufacturing Businesses

Question 1

Management Accounting

Answer 1

• Measures, analyses and reports financial and non-financial information that helps managers make decisions to fulfill the goals of the firm.
• Provides information to help managers to:
• Choose, communicate and implement strategy
• Plan and control operations
• Coordinate product design, production and marketing decisions
• Evaluate performance

Question 2

Costs

Answer 2

Resources sacrificed to achieve a specific objective.

Question 3

Cost object

Answer 3

It is the product, service, project, activity or department for which measurement of costs is desired.

Question 4

Direct costs

Answer 4

Can be directly traced to a cost object.
e.g. direct materials and direct labour

Question 5

Indirect costs

Answer 5

Related to the particular cost object but cannot be traced easily.
e.g. manufacturing overheads

Question 6

What do manufacturing companies do?

Answer 6

Produce inventory.
They use labour, plant, and equipment to turn raw materials into finished products.

Question 7

Inventory for manufacturing companies

Answer 7

1. Raw materials inventory
2. Work in process inventory
3. FInished goods inventory

Question 8

How do you calculate COGS for a manufacturing company?

Answer 8

Beginning finished goods inventory + COGM - Ending FG inventory

Question 9

COGM equation

Answer 9

Beginning WIP + Manufacturing Costs - Ending WIP

Question 10

Manufacturing Costs equation

Answer 10

Direct materials used + direct labour + manufacturing overhead

Question 11

Direct materials used

Answer 11

Beginning raw materials inventory + RM pruchases - enfing RM inventr

Question 12

ory